Date: Thursday, December 21, 2017
At this time of the year t’is usually the season to be merry…unless you are worried about budgets that is. The summer months seem long gone now, when market data budget planning would have been just getting underway for next year, and market data teams and individuals were managing to submit their budgets in time for approval, working the odd late night here and there, and all was good. Not long after, the 2018 price changes for market data started to trickle through, and they weren’t the usual 5% increases we had come to expect and budget for. This time there were new costs to consider due to MiFID II coming into effect in January. Costs for disaggregated data, datafeed charges, and all sorts of other nuances were included in the details of the now-expanded price list and policy documents. While the price changes and numerous policy updates will no doubt present a challenge for managing and budgeting for market data usage, the changes have not come as a surprise to anyone, with the effective date for MiFID II broadly communicated industry-wide. However, until now, few have been able to interpret or calculate precisely what the changes would amount to, with some even taking a 'wait and see' approach. Inevitably, there has been a lack of detail for budget planning and, now that the new prices and policies are finally here, with more still to come in January, the challenge for some market data managers is to try to work out how to inform the business that there may be a shortfall between the budget and the actual cost of market data for next year. This might result in some difficult conversations around re-budgeting.
Axon has been busy adding the new policies and price changes to its compliance database - PEAR - meaning you can already go in and work out what your new costs will be using the ‘What if’ functionality. You can also dig more deeply into the detail of the policy changes which we have summarised for our users in plain English to help you get your head round the nuances of the new policies. With the new changes in PEAR you can also start to investigate your usage of data by asset class, to see if the disaggregation of data can help your business model. However, all of this takes time, which is a limited resource for most, even more so at this time of year with parties and people using up their annual leave before the end of the year. As an alternative, we can use our technology and market data expertise to help you see the wood from the trees. Our Application Compliance Tool (ACT), will model your usage based on the questions you ask your application owners, giving you an overview of the licences you need. If you still don’t have time, with the Axon Compliance Review service, all the hard work is taken out of your hands as we collect the data on your behalf, load it to ACT, then provide you with a report on where to save on costs. We can even tell you where you might be able to start netting usage when the new ‘per user’ data charges come into force in a few weeks’ time. All these solutions can be tailored to suit your needs and will help you get your market data spend back on track, maybe even saving you a little more than expected. For further information contact Sales@axonfs.com.